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A Journey From Lawmaker to Lobbyist and Back Again

WASHINGTON — When Cooper Industries, a century-old manufacturing company based in Texas, moved its headquarters to Bermuda to slash its American income tax bill, it had to turn to a Washington insider with extraordinary contacts to soothe a seething Congress.

Dan Coats, then a former senator and ambassador to Germany, served as co-chairman of a team of lobbyists in 2007 who worked behind the scenes to successfully block Senate legislation that would have terminated a tax loophole worth hundreds of millions of dollars in additional cash flow to Cooper Industries.

Now Mr. Coats, a Republican from Indiana, is about to make a striking transition. He is spinning the revolving door backward.

There is no rule that would keep Mr. Coats from voting on issues that he handled as a lobbyist, and he does not intend to recuse himself when former clients are affected by his votes. But he has said he will not let prior connections influence him.

Mr. Coats is hardly the only former lobbyist to join Congress. The list includes Senator John Thune, Republican of South Dakota, and Representative Dan Lungren, Republican of California. Representative Doris Matsui of California, a Democrat, was also a lobbyist with a particularly extensive client list.

But few rival Mr. Coats, whose blue-chip list of 36 clients included corporate titans like General Electric and Google. These companies routinely have major legislative issues pending in Congress — and in the Senate Finance Committee — that Mr. Coats will now be asked to vote on, often with great consequences to their bottom line.

What makes Mr. Coats’s pedigree even more attention-grabbing is that he is part of a Republican class whose dominant narrative was anti-Washington, animated by a Tea Party movement that pledged to take back the Capitol from special interests.

Mr. Coats, who declined to be interviewed for this article, was originally opposed by Tea Party leaders, though he picked up their support after winning the Republican nomination.

With a salary of $603,609, he was co-chairman of the Washington government relations office of King & Spaulding, a legal and lobbying powerhouse that in 2008 had more than two dozen registered lobbyists and took in $8 million in fees.

“He will come in with a lot of baggage,” said William H. Hudnut III, a former Republican member of Congress and longtime mayor of Indianapolis, who added that he has high respect for Mr. Coats. “People will say, in his back pocket he has this company he is friendly with, creating suspicions about whether he is being straight.”

The nearly seven years that Mr. Coats, 67, worked as a lobbyist was a dominant issue in his 2010 campaign. (Mr. Coats and his opponent, Representative Brad Ellsworth, first met when Mr. Coats visited Mr. Ellsworth’s House office with a group of lobbying clients).

But voters in the state — which Mr. Coats represented for eight years in the House and then a decade in the Senate before he retired in 1999, citing a self-imposed term-limit commitment — seemed to accept his promise that he would not be beholden to special interests.

“From the moment of his return to Indiana politics to the election, that was the talking point that Democrats used,” said Brian Howey, an Indiana political analyst. “But it just did not stick.”

Photo

Dan Coats, leaving the White House in 2005, will again represent Indiana in the Senate.Credit
Ron Edmonds/Associated Press

During the campaign, Mr. Coats was forthcoming, releasing a list of his clients, both from King & Spalding, where he worked from 2005 until he announced his candidacy in February, and from Verner Liipfert, where he worked from 1999 to 2001, when he became ambassador to Germany, a post he held for four years.

He said he intervened with members of Congress for Sprint as it sought protection from lawsuits for its role in assisting United States intelligence agencies in conducting a surveillance program without warrants.

He also said he contacted officials at the Defense Department on behalf of the Festo Corporation, a German company, as it successfully pursued a federal contract to train workers in Iraq to fix water pumps. And he helped Google increase its lobbying presence by introducing top executives to his former Senate colleagues.

“We’ve hired a lobbyist, we’ve met with all of the senators and congressmen from our districts where we have large facilities, we’ve leveraged our voice in D.C. on this issue, and we obviously pushed it back,” Kirk S. Hachigian, the company chairman, said in a July 2007 earnings call from Houston, where the top executives still work even though the legal corporate headquarters is overseas. “We have made our point now very clear to a number of senators and a number of congressmen.”

Executives at Cooper Industries and King & Spalding declined to comment when asked last week about Mr. Coats’s role in this lobbying push. A statement Mr. Coats released during his campaign detailing his lobbying clients included a specific reference to the effort on behalf of Cooper Industries.

But Pete Seat, an aide to Mr. Coats, said Saturday that Mr. Coats had no recollection of personally intervening on behalf of Cooper Industries on the tax issue, meaning his colleagues at the firm directly handled the matter. The only direct work for Cooper Industries Mr. Coats could recall, Mr. Seat said, consisted of speaking with the Commerce Department on an unrelated international trade matter.

Cooper Industries, which paid $1.1 million in lobbying fees to King & Spalding from 2007 to 2009, is one of many former clients that are likely to have issues before the Senate Finance Committee in the coming years.

Mr. Coats, first in 2001 and then again from 2006 to 2009, served as a lobbyist for companies that dominate the multibillion-dollar kidney dialysis and treatment business in the United States, including Amgen and DaVita. They have repeatedly sparred with the federal government over how much it will pay for the services and drugs they provide.

Mr. Coats introduced DaVita’s chief executive to members of Congress and their staffs.

One kidney care executive said that as the companies wait for the new rules governing reimbursement for dialysis care to go into effect, they are already considering appealing to the Senate Finance Committee, which has jurisdiction over Medicare, to intervene. And they are looking forward to having Mr. Coats in place to help push their cause.

Committee assignments have not been decided, and because the finance panel is one of the most coveted spots, it is unclear whether Mr. Coats will get a seat.

James A. Thurber, a professor at American University who has tracked former lobbyists elected to Congress, said that if Mr. Coats took up matters related to former clients, there could be an appearance of conflict because “he knows their arguments, and many of them know him personally.”

Mr. Coats’s aides reject that suggestion. “His only client is the people of Indiana that have entrusted him to represent their voices and values in the U.S. Senate,” Mr. Seat said.

Several former Capitol Hill colleagues said Mr. Coats had a reputation for integrity and would just have to get used to the increased scrutiny.

“Almost everybody comes to Congress from some sort of a position where they have a history and vested interest,” said Mickey Edwards, an Oklahoma Republican who served in the House with Mr. Coats. “One of the things you do when you take oath of office is set aside those past commitments.”

A version of this article appears in print on November 14, 2010, on Page A1 of the New York edition with the headline: A Journey From Lawmaker To Lobbyist and Back Again. Order Reprints|Today's Paper|Subscribe